ETF outflows and exchange inflows signal rising sell intent.
Fed rate pause and high inflation weigh on crypto demand.
February is shaping up to be the fifth straight month of losses for in terms. The recent fall fits into a wider trend that suggests the start of a possible crypto winter. If that plays out, weakness in the market could continue until late 2026.
At the start of the month, prices dropped faster after news that Kevin Warsh had been nominated as the next Federal Reserve chair. That announcement also hit metal markets.
Right now, markets are also reacting to uncertainty around Iran and a US Supreme Court ruling that said most of the tariffs introduced by President Donald Trump were illegal.
From a technical view, the $60,000 level is key for Bitcoin. If the price falls below that mark, it could lead to a sharper decline.
Extreme Fear in the Bitcoin Market
Measures of fear in the Bitcoin market are close to record highs. Prices have been falling sharply, with short pauses in between. Even so, fear alone does not fully explain the selloff. Stock markets, which also react strongly to risk, have held up better. Bitcoin has become an asset that can deliver strong gains in good times, yet it is often among the first to be sold when markets turn tense.
Two trends highlight the current mood. Large hedge funds have been cutting their exposure to Bitcoin ETFs, with sales estimated at up to 28 percent by the end of last year. At the same time, more Bitcoin is flowing into exchanges. That matters because long-term holders usually store their coins in private wallets. When investors move Bitcoin onto exchanges, it often signals an intention to sell.
Expectations Around US Monetary Policy are Not Helping Buyers
The position since the start of the year has added pressure on the wider digital currency market. The central bank has paused its rate cut cycle, which has reduced hopes for easier monetary policy in the near term.
Investors now expect the next 25 basis point rate cut to come in July, though that timing remains uncertain. The delay in rate relief has weighed on demand for riskier assets such as cryptocurrencies.
US policymakers are sticking to the same message. remains too high, and that gives them reason to hold off on further rate cuts.
The labor market is still fairly stable, and there are few clear signs of a recession, even though some recent data has been softer. Taken together, this allows the Federal Reserve to delay the next phase of monetary easing.
Is Bitcoin Aiming for Levels Below $60,000?
Bitcoin remains under steady selling pressure. Its recent failure to move above $70,000 has kept the broader downtrend intact.
The next likely move is another test of the $60,000 level. If the price falls below that mark, it could trigger a fresh leg lower.
If the decline continues, the next key level to watch is around $53,000 per coin. That area acted as strong support in 2024 and could become the next target for sellers.
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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belong to the investor. We also do not provide any investment advisory services.
